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Income Tax Refund in India: Eligibility, Procedure and Types

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Hiral Vakil

Form 12BB
ITR Refund
Salary Components

A taxpayer becomes eligible for an income tax refund when taxes paid are higher than your actual tax liability inclusive of interest. It could be in the form of advance tax, self-assessment tax, TDS, etc. In the following instances, the taxpayer becomes eligible to claim tax refund:

How to claim Income Tax Refund?

A few basic things to keep in mind if you want to claim a refund.

Once you have filed your income tax return, you need to wait for assessment from the Income Tax Department. Here what you need to do:

File Your Tax Return

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File Your Tax Return

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Open Your Account Today

Types of refund status

Once a tax payer files his return, they want to know the status of their refund. IT Department has classified different refund statuses for the taxpayer. It is important to understand the meaning of refund status. Since refund status determines the next course of action that needs to be taken by the taxpayer.

Check Income Tax Refund Status
Track Income Tax Refund online using PAN. The Income Tax Department issues the refund once the ITR is processed. Check your ITR refund status.
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Check Income Tax Refund Status
Track Income Tax Refund online using PAN. The Income Tax Department issues the refund once the ITR is processed. Check your ITR refund status.
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Different Refund Status on income tax e-filing website:

Refund Status Meaning Course of Action
No e-filing has been done for this assessment year You have missed filing the return for that assessment year. OR The paper return was filed for that year.    File your Income Tax Return immediately. You can file your return from here.
Not Determined IT Department has still not processed your return Confirm if your return is filed and duly e-Verified. 
Refund Paid IT Department has sent the refund to you.  If you have not received a refund yet: In case of direct credit to your bank account contact your bank. In case of refund cheque, check out with the post department.
No Demand No Refund This means you have claimed a refund in your return but as per the department’s calculation, you are not liable for a refund.  In case of any error in a filed return, revise your return. OR If you have received an intimation then understand the reason of difference and then file rectification return.
Refund Unpaid Income Tax Department has sent a refund to you but either your address is wrong or bank details provided are incorrect.   Find out the reason for refund failure and then raise a refund reissue request
ITR processed refund determined and sent out to Refund Banker The department has sent the refund details to the refund banker. Contact your bank. 
Demand determined Department has rejected your refund claim and raised an outstanding demand.  Understand the notice. If you find that your own refund request was erroneous then pay the demand. OR If there is a mistake made by the department, you can file a rectification.
Contact Jurisdictional Assessing Officer Whenever the department needs some more information regarding your ITR. You receive this message. Contact your AO via telephone, mail or post.
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Interest on Income Tax Refund

Many times the taxpayer does not get the refund in due time, in such a case Income Tax Department pays interest on late refund. However, no interest shall be payable if the amount of refund is less than 10% of the tax as determined under section 143(1) or tax determined under regular assessment. Section 244A mentions the provisions in this regard which are as follows:

Amount of Interest on Refund

Taxability of Interest on Income Tax Refund

The interest amount is taxable under the head “Income from other sources”. Further, while filing returns for the financial year (FY) in which the refund was given, the interest will be taxable as per the tax slab rate of the person.

FAQs

Why am I not getting any refund?

Your may not be getting refund for one of the following reasons:
1. You may not have filed an income tax return for the relevant assessment year
2. Your taxes paid matches your total tax liability for a relevant assessment year
3. You might have forgotten to claim taxes paid on your return
4. You might have furnished incorrect bank account details in your return

Is income tax refund taxable?

No, refund received by a taxpayer is not taxable. But, any interest received on the refund is taxable in the year in which refund is received by a taxpayer.

How long does it take to get a tax refund?

Income Tax Department processes the refund only after processing your ITR. Generally, it takes 30-45 days from the date of e-verification of your Income Tax Return to get your refund credited. Further, IT Department is planning on processing refund faster in coming years.

What needs to be done if the refund is not processed?

Taxpayer’s records are transferred to the jurisdictional assessing officer by CPC after a particular time period for every assessment year. Taxpayers receive an intimation regarding the same. Therefore, once the AO receives the files, one can follow up for a refund by submitting a letter in this regard to the jurisdictional assessing officer and follow up personally at regular intervals.

Where will I get my income tax refund?

You will receive your refund directly in your Primary bank account. You can choose the primary bank account while filing your ITR.

What to do if my tax Refund is returned?

If your tax refund status is ‘refund returned’ then it means when ITD had tried to credit the refund to your bank account, but it failed. In such a case you are required to submit a refund reissue request.

Got Questions? Ask Away!

  1. Hi @emmy

    You can make a Refund Reissue request with the correct account details.